patrick.net

Oops, I missed the part about a dollar limit on the property tax addition to the standard deduction.

It's $1,000 for us married folks, so it will still take $250 or so off my taxes.

Maybe next year it will be raised along with the normal standard deduction.

I was interested in buying a house a few years ago but it there seemed to be too much of an ownership premium between renting and owning, so I didn't buy it.

Now there's getting a high ownership premium between those one ounce bullion coins and the GLD and SLV. That sounds like another bubble.

I live in Glenbrook Apartment, Cupertino, 95014 -- two bedroom, 1100 sq ft, upper level with balcony. I pay rent of 2290 per month. For the last four years, Glenbrook has been raising rent yearly once at August by 8%. Do you think they will do so in 2009 August? If they do, what will be their excuse -- higher prices of everything?

@OO

Could you translate the Bloomberg article into English? I am not in the finance field and am confused about the Treasury issue. I own short term Treasuries due in January through Vanguard Brokerage. Are they at risk?

well permaRenter that is interesting.

I've lived in the same neighborhood in 95148 for 41 yrs, the typical sales price increase in regression over any extended interval over all those years has been about 8%. Right now it's slightly below, about 7.6% going back to 1968, probably as good a buy indicator as any I've seen.

@Danville,

The Treasury is 100% safe in face value, because US government can always foot its promise through printing. But, between the Treasury and YOU, there is a layer called PD, which is primary dealer, because the government doesn't deal directly with you, they deal with you through primary dealers like Chase JP Morgan, Goldman Sachs, Mizuho etc.
http://en.wikipedia.org/wiki/Primary_dealers

Over the course of last year or so, the problem of non-delivery has gotten very rampant in the Treasury market, which means, when you pay your money to a fund that claims to be holding Treasury, you think you are holding Treasury, but no, these PDs are taking in money WITHOUT delivery. This is also known in the stock market as NAKED SHORT, which means two things (or more)
1) scam, they just take your money and pretend to sell you Treasury. In the end, you pay them $$$ and hold NOTHING, or
2) they forsee the Treasury price to collapse, so they are trying to sell as much T as possible and buy them back when the price goes down.

Vanguard is a reputable fund house, unlike PIMCO, so I tend to think that they are more likely to hold some real T in their portfolio, but there is NO knowing unless you call them to verify. Even Treasurydirect is not safe in this scenario, because you are still going through PDs, and one of those PDs can do the same fail-to-deliver to you.

IMHO, it is much better to hold physical cash, even in USD, than holding US T, which tracks the parabolic pattern of oil, and is currently at the historical high. Short-term US T has reached a negative return, you'd be much better off holding straight cash, physical cash, in your Sealy bank.

OO and DW:

I'd assume if you're elite richees, you wouldn't fart away your time on this website. So, if you're among the rest of us, you're in the savingsbonds.org crowd.

Together with spouse you can accumulate about 40k per year of these. Used to be able to build up a portfolio up to 120K per year. For those that you hold for at least a year they are all dollar good, an awesome way to "save". I have some earning over 8% interest, tax deferred, free from CA SIT.

OO,

Wow. That is just plain wild. The big broker/dealers will find any systemic weakness and exploit it to the max. Especially now, they are desperate to cover their losses from the mortgage market, and shenanigans in the bond market appears to the next big thing, along perhaps with speculating in beaten-down mortgage paper.

Vanguard:

I have more faith in them than most any other mutual fund company or broker when it comes to protecting the integrity of the customer assets.

That does NOT mean that Vanguard funds do not lose market value. They have and they do. I just think they are more conservative in protecting against outright securities fraud. But as OO said, Vanguard is NOT a Primary Dealer. But I expect Vanguard pay very close attention to their transactions with the Primary Dealers.

Not investment advice, but I use Vanguard for some purposes.

Perma,

If you're not married to Cupertino schools, I think you should get a much better deal elsewhere :-).

Besides, Cupertino has horrible drivers. :(

Are prices coming down yet? I have stopped looking completely.

For the last four years, Glenbrook has been raising rent yearly once at August by 8%. Do you think they will do so in 2009 August?

I live in Sunnyvale and they have been raising our rent every lease period for the last couple years. This time around, it looks like rent will remain the same.

@OO

My guess, then, is that it would be safer buy treasuries at www.treasurydirect.gov
What do you think?

@OO

I just re-read your response. It seems that you even go through a dealer with www.treasurydirect.gov which seems odd and very misleading. Their website implies that you are dealing directly with the government and not an intermediary. Scary stuff.

Happy New Year all. According to the latest H.3 report from the Fed, nonborrowed reserves has gone positive! Also note, the latest TAF auction (85 days, $150B) had a bid-to-cover ratio of .69 ($102B); the previous auction (85 days ago) had a bid-to-cover of .92 ($138B) so things seem to be settling down a bit (or at least moving to the more exotic Fed/Treasury programs). The Treasury Supplemental account in the H.4.1 release also appears to be getting paid down.

Using 2% MoM declines we reach equilibrium now in April/May of 2009 - but that is relativeto retracing the bubble using an anual BA historic appreciation of 4.25%.
Duke, somebody out there agrees with you. A C/S SF Home Price Index future for May 09 sold for 119 yesterday. Also, check out the Nov 09 future that traded hands today for 116.

http://www.treasurydirect.gov/about.htm

"TreasuryDirect is brought to you by the U.S. Department of the Treasury Bureau of the Public Debt."

"About TreasuryDirect
TreasuryDirect is the first and only financial services website that lets you buy and redeem securities directly from the U.S. Department of the Treasury in paperless electronic form."

Venture Source said the median age of the venture-backed firm acquired in 2008 hit a record 6.5 years. Of the seven that went public last year, the median age was 8.3 years, also a record.

"The ever-increasing amount of time it takes for a company to go public or get acquired is stretching out the lifecycle of venture funds and therefore returns to venture firms and their limited partners," Canning said.

All of this goes to explain why veteran Silicon Valley investment firms such as Sequoia Capital and Benchmark Capital warned startups in October to lay off workers and slow hiring to extend their runway - the length of time they can operate on invested capital before cash flow carries them aloft.

"In market downturns, frugality is not only a virtue, but also it could be the difference between survival and failure," said Benchmark partner Bill Gurley. "You should watch 'months of cash' as your most important variable."

Frugality may have its place, but one also needs to hedge for the end-of-the-world risk. :) If the world ends tomorrow, have you enjoyed enough, or have you delayed your gratification beyond the end of time?

A quote from a 1924 edition of the American Bankers Association Journal sums up what is currently happening:

"When, through the process of law, the common people lose their homes, they will become more docile and more easily governed through the strong arm of government applied by a central power of wealth under leading financiers. These truths are well known among our principal men who are now engaged in forming imperialism to govern the world. By dividing the voter through the political party system, we can get them to expend their energies in fighting for questions of no importance."

The Secret Bailout of J.P. Morgan
http://globalslaves.blogspot.com/2009/01/secret-bailout-of-j.html

Why Paulson Let Lehman Brothers Fail
http://globalslaves.blogspot.com/2009/01/why-paulson-let-lehman-brothers-fail.html

Blow SUYA,

So the claim is that Paulson let Lehman fail in order to give JP Morgan a covert bailout under the guise of helping JP Morgan acquire Lehman.

Pretty far fetched stuff, but perhaps not completely unbelievable.

The website looks pretty kooky, though.The site would be more believable if it backed up the claims with references, e.g. the claim about creating new classes of (lower priced) put options with expiration dates only 5-8 dates ahead.

In over-allocating money to one position, investors are typically prone to several short cuts that get them in trouble. One primary mistake is uniquely intertwined with Madoff's alleged scheme -- the allure of consistent small gains. A chart of Madoff's purported returns shows a line going steadily up, month after month, 1 or 2 percent. Those kinds of gains are intoxicating. Richard Peterson, a psychiatrist who co-founded MarketPsych, a Los Angeles psychological and financial consulting group, said we actually fall in love with them.

"It's like a slot machine that pays you a little each time," he said. "Over time you kind of fall in love with that machine. You'll actually have the hormones and strong attachment and bonding. You trust it. You want more satisfaction from these gains."

Peterson pointed to a famous study in Taiwan showing that gamblers chose a strategy paying them repeated small amounts even if at some point they had to take a huge loss. In more than 200 trials, the gamblers were given different decks to select cards from. In one deck, on average four of the five cards produced small gains, while the fifth card wiped out the wins and led them down a money losing path. The other decks of cards produced, on average, four small losses and one big win, which netted out to overall gains. The researchers were stunned when, given a choice, gamblers continued to want to pull cards from the small-gain deck.

"We like these consistent gains," Peterson said. "You can't underestimate their power."

Perma,

Kind of like the 1991-2000 "buy-and-hold" stock market.

In over-allocating money to one position, investors are typically prone to several short cuts that get them in trouble. One primary mistake is uniquely intertwined with Madoff’s alleged scheme — the allure of consistent small gains. A chart of Madoff’s purported returns shows a line going steadily up, month after month, 1 or 2 percent.

Is this for real?

What a crappy Ponzi scheme! I beat him last year *without* cheating!

One of the best things about deflation is cheap lobsters.

Wait a minute, didn't someone else post this?

Duped employees and clients of alleged scammer Bernard Madoff are bitterly selling off the swag they received from his company on eBay.

It's a whole new category of collectibles, with more than 100 promotional trinkets bearing the name or symbol of Bernard L. Madoff Investment Securities. They were given to clients and employees over the years as tokens of appreciation, even as Madoff was allegedly stealing billions from investors.

"Emom1013" is selling a pair of $20 T-shirts given out at the 2006 company picnic at the Madoff family's Long Island, N.Y., estate.

The seller writes: "The proceeds from this auction go directly to a family whose husband/father is facing being out of a job and health insurance thanks to good old Bernie."

Other items include humidors, binoculars, beach towels, coolers, mousepads, shirts and jackets. The most expensive doodads so far include a Madoff flashlight that sold for $387 and a fleece sweater that went for $455.

Somehow "Madoff" and "fleece" just go together.

Re: Microsoft layoff, talked to a friend higher up the food chain in Redmond, he said it is NOT off the table, but hard to say 10% or 17%, however, it will be a big number. The way that MSFT deals with attrition or "soft" lay off is, they do a large scale reorg, and then give you 1 month to find a job internally, when the 1 month is up and you still cannot find a job, you must RESIGN, so that MSFT pays NO severance to you. A re-orged employee has to sign such a document to give up severance before being allowed to do an internal job search. In the good ole days, internal job search can be allowed to last 2 months, but they cut it down in the last decade since MSFT stock price peaked.

So his conclusion is, there won't be an outright layoff, if SteveB goes the outright layoff route, then things will be really really stinky. Most probably they are going the large scale reorg route while drastically reducing internal openings so that it is guaranteed that a big number of MSFT employees will have to "resign" 30 days later. His org is going through some budget re-review for cuts, so the layoff "rumor" is not ungrounded.

One of the best things about deflation is cheap lobsters.

Wait a minute, didn’t someone else post this?

I wonder who else in the world would post such a thing.

In respose to:
A chart of Madoff’s purported returns shows a line going steadily up, month after month, 1 or 2 percent.

Kewp said:

Is this for real?

What a crappy Ponzi scheme! I beat him last year *without* cheating!

You beat 12%-24% on your investments last year (1%-2% per month)?

MIcrosoft sounds like such a NICE place to work. Maybe they can apply for some help from the Bill Gates foundation?

What happens if you do not sign the no-severance clause -- you get laid off and get severance?

MIcrosoft sounds like such a NICE place to work. Maybe they can apply for some help from the Bill Gates foundation?

What makes you think that companies layoff employees mostly because they need cash?

they == the employees

Oh. :) Never mind.

Twitter, a service that can send a 140-character message to any computer or cell phone but, so far, has no way to make money. Founded by Evan Williams, the 36-year-old Web entrepreneur who helped popularize blogging, Twitter is an example of the whimsical developments that have, until now, found Silicon Valley tolerant of failures in the pursuit of success.

justme,

Microsoft is a pretty harsh place to work. They have forced curve distribution for performance review, which means even if you perform well, but if your org's colleagues are all performing better, you will get a low point anyway. In the good ole days when they give out stock options, only the top 5% of the department got 90% of the stock options, leaving 10% to the mediocre and under-performers (under forced curve distribution) got none, so it is a place where winners take all. Now, since they are not giving out stock options any more, they just reorg the hell out of under-performers. I never asked what will happen if you choose not to sign over severance, I will ask next time I talk to him.

However, Microsoft does offer very generous medical insurance package, it is probably the best in the industry. They also have this paternity leave for new dads to take off some time while on paycheck. You just have to work your butt off to earn these privileges. But yes, it is very hostile place to work, most of my Seattle friends work there, but they all agree that it is not a happy place to work, but if you live in Seattle, you have no choice.

OO,

I can only imagine.

(You may not agree with the rest of this)

No wonder their products suck so badly. It is amazing how little the company accomplishes with all the resources that they expend. Must be all that hysterical "competition" and "performance" going on all day long.

I have a better idea for Microsoft: Grade all your products on a curve and throw out the lower 90%.

Bap33,

I can assure you that border fence will go up followed by amnesty ... that is the game plan for Democrats ....

Uh, Bap33, Obama is not QUITE president yet. Wait and see,

justme,

I believe that the biggest reason for MSFT's decline is because they have lost their best talents around 2000. I know a few old-timers who joined prior to IPO or Windows 3.0 who helped build the company came down to the Bay Area, and ironically, MOST of the ex-MSFTies in the Bay Area ended up in Google. Those who stayed in Seattle started their own business or VC. The team that trashed Netscape have almost completely left.

The internal system worked for MSFT for many years, and it is a part of its unique culture. But when the growth phase is over, the real talents moved on to better opportunities, MSFT is stuck with many employees who are either leeches or political animals who only know how to do performance reviews.

I have met quite a few members on their OS team, and let me put it this way, I am not surprised that they churn out shitty product. And if these few were to come down and apply for a job at a company known for being difficult to get in, e.g. google, they won't stand a chance.

And if these few were to come down and apply for a job at a company known for being difficult to get in, e.g. google, they won’t stand a chance.

I thought Google is more growth-dependent than Microsoft. Perhaps they see this and choose to stay with the largest software company in the world?